Franchising in the Education Sector
By his own admis-sion, Dinesh Vic-tor would not stand out in a crowd. This marathon runner, travel buff and chess enthusiast may look like a man of few words but is extremely articulate and communicative when talk-ing about the spirit of entre-preneurship and his venture, SIP Academy India Pvt. Ltd., which was established in 2003. The company works in the area of developing children’s mental abilities through Aba-cus & Brain Gym programme and other programmes suchas AMAL, MIKIDS, Global Art and VISTA. The company is spread wide in 225 cities across 18 states. More than 300,000 children have gradu-ated since 2003 enhancing their life skills.
Dinesh Victor is a Chemi-cal Engineer from Indian In-stitute of Technology, Bombay(1992) and also holds a man-agement degree in Market-ing from the prestigious In-dian Institute of Management, Ahmedabad (1994). Hailing from a typical middle-class South Indian family he was a keen student and till date val-ues education as one of the most important things that can help excel in life. He started his corporate career as a Product Manager with Godrej’s FMCG division and was instrumental in the launch of Godrej hair dye sachet, which built a mar-ket share of 15 per cent with-in a year of launch. As Area Sales manager with the same company in Chennai, Victor increased business by 30 percent. The finance sector soon beckoned him; he worked for ANZ Grindlays and Standard Chartered Banks.
In 2003, he says, he wasbitten by the ‘entrepreneurship bug’. He started Genius Edu-cation and Learning Systems(GELS) with a few friends, where he built 75 franchisee centre operations in four states.
With SIP Academy, howev-er, Victor says he has found his calling, since it not only gives the entrepreneur in him wings, but also satisfies his urge to do something where social devel-opment is concerned. SIP also supports women to become economically independent by taking up SIP franchises. Becoming an entrepreneur is a decision he says he has never regretted.
Interview
How do you see the current opportunities in franchising in the education sector?
The current opportunities in franchising is varied. From food outlets, wedding planners to beauty salons, there is a va-riety of choices for any bud-ding entrepreneur to choose. Franchising in the Education sector has many segments right from pre-school to school, af-ter school and also post school. Then again there are finishing schools, computer training institutes, English language training, etc. SIP Academy is largely in the After School market. There are many oppor-tunities for good quality fran-chisors and franchisees though one must agree that the market looks quite crowded especially in the metros.
How different is it from say, a decade ago?
Very different. Earlier the typical Indian thinking was to get a job and make a career. Franchising was not a major business 10 years ago. Most of the After School franchisees started around 10- 12 years ago starting with the Abacus pro-gramme that grew very rapid-ly. Today you have a wide vari-ety of educational programmes which are being franchised.
How do you rate franchis-ing as a business opportunity in India? What is the biggest driver in business in this cat-egory?
Franchising is still a very large under-served business segment in India. As capital is scarce franchising will always be a good option in a develop-ing economy. The concept of sharing the risk and reward is the key to driving franchising.
In the education sector, what is a franchisor-franchi-see relationship like? Is it dif-ferent from other categories?
In my view it should not be very different from any ser-vice franchisee. A franchisee-franchisor relationship is like a relationship between busi-ness partners. Education needs a long term outlook and per-sonal involvement in the early period. However that would be
true of others also I guess.
Which is the most lucrative age group for a business to ca-ter to in the education sector?Why?
All segments have their market. Though usually par-ents of children in the 10-12 classes have a tendency to pay more and hence it would be the most lucrative is my guess.
How did you arrive at fran-chising as a business model for SIP Academy?
It was the industry model across the world by SIP and other Abacus Companies. So we just adapted it to Indian conditions.
Have you modified or changed your offering to your business partners? Can you site the reasons behind such moves.
Yes, we tweaked it a bit to make it more balanced for both franchisor and franchisee as we felt the current model used by others was not franchisee friendly.
We made it balanced to make it more in line with our focus on quality and also make it a win-win for both.
While there could be many strategies that work for fran-chising in the education sec-tor, what in your experience doesn’t work?
I would say that growth without a proper focus on quality doesn’t work.
What is the backbone of a great franchise?
Committed corporate team to cater to the franchisee and treating them as entrepre-neurs. Providing them the sup-port they require. Continous Training & Development pro-grammes, Marketing support, for that matter going with them for a business opportunity.
What are the challenges that can be faced by a franchi-see in this business?
Not too many – marketing can be a challenge but I guess proper cash flow and financial planning also could be an is-sue.
How optimistic are you about this business model in the education sector in the long run?
In our segment (after school) this is the only way to succeed. I am pretty optimistic about this.
BUDDING MANAGERS
MARCH 2014 ISSUE
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Posted On: Thursday, 10 April, 2014 - 10:44